Union Budget 2026: J&K Central Grants Rise, Mixed Reactions

The budget presented by the Union Finance Minister Nirmala Sitharaman in Parliament on Sunday, 1 February, has drawn a mixed reaction from Jammu and Kashmir, with some political parties and industrialists hailing the increase in the central grants to the Union Territory, while others slamming the government for ignoring the region.

In the Union Budget, the Central government proposed a grant-in-aid of ₹43,290.29 crore to Jammu and Kashmir for 2026-27, nearly ₹2,000 crore more than this year. Grants for the current year have been revised to ₹41,340 crore from the original ₹41,000.07 crore. For next year, ₹42,650 crore will cover the UT’s resource deficit.

Additionally, ₹279 crore is for the Union Territory Disaster Response Fund, ₹259 crore for the Jhelum-Tawi Flood Recovery Project, and ₹101 crore for capital expenditure.

Jammu and Kashmir Lieutenant Governor Manoj Sinha welcomed the budget, stating that it will ensure overall progress across the country, including in the Union Territory. “It will prioritise economic acceleration, create future-ready infrastructure, sustain growth momentum, chart a path toward the $5 trillion economy milestone within a few years, and implement a comprehensive fiscal strategy that balances growth ambition with social welfare,” said Sinha.

BJP spokesman Manzoor Bhat said the budget is historic and will not only promote tourism in Jammu and Kashmir but also boost development in the Union Territory. He added that it focuses on expanding employment opportunities and tourism. “We had organised a programme in Baramulla to deliberate on the budget with the people. The reaction from the people in Kashmir, as well as our party, is that it’s a very historic budget which will also ensure that there is development, particularly in the union territory of Jammu and Kashmir,” he says.

Although the Central government has increased the grant-in-aid, Jammu and Kashmir was expecting more and had asked the government provide Rs 50,000 crore. J&K has been facing a fund shortage to carry out developmental projects, with several of them declared as languishing projects for dragging on for years. There were also expectations that a package would be announced to compensate fruit growers for the losses that they suffered last year due to the closure of the Jammu-Srinagar National Highway, as well as the damage to the crops in the floods, which were caused by several days of heavy rains. The fruit grower bodies put the losses at over ₹2,000 crore.

Congress senior leader G.N. Monga said Jammu and Kashmir should have received a package to compensate farmers for losses suffered in last year’s floods.

Former Minister and People’s Democratic Front Chairman Hakim Yasin said there was nothing in the budget to please the people of Kashmir.

“We suffered heavy losses in the floods last year. A package should have been announced to compensate farmers. The budget did not address rising unemployment, support for the handicrafts trade, incentives for the horticulture sector, or fresh investment in power projects to boost the local economy. An increase of just ₹2,000 crore in central grants is hardly cause for celebration,” he said.

President of the Kashmir Chamber of Commerce and Industry (KCCI) Javed Ahmad Tenga said the budget would boost development following an increase in central assistance to Jammu and Kashmir. “Cancer drugs will become cheaper, and overall, I think the budget is good for J&K, as developmental funding has been increased. However, we also need to see how it translates on the ground and what real impact it has on people’s lives,” he added.